Re: Crude Oil-Another Story of Supply Inelasticity. GS much more confident of near-term inelasticity than even I am. Today’s oil rip is even lifting Dec’23 materially.
I’m going out on a limb and predicting that we’ve seen the nadir in this chart in the short to medium-term, given this Admin’s shift in policies.
From the same JPM research piece: “…based on the current pace of electric vehicle sales, it would take 17 years to
offset the loss of the Keystone XL oil/gasoline supply. In the meantime, to power the ICE cars that remain, the
US will simply import oil and/or refined gasoline…”
Not even talking about the moratorium on new oil & gas leases on Fed lands yet...Fill up yer tanks folks!

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More from @UrbanKaoboy

23 Feb
Re: Fannie/Freddie-Why You Should Care. I'm pulling together a "super-thread" of my key musings on the largest restructuring and governmental theft in history. It's meant to be 1) a primer to the uninitiated, 2) a reference for anyone involved over the last several yrs. Cont'd...
In September, 2019, I wrote a primer on the Fannie/Freddie saga and how to take a position in the JPS (junior preferred securities):
I have been involved in this situation since conservatorship back in 2008, but the first time I publicly presented about this was in May, 2011 — over 1 year before the NWS (Net Worth Sweep). That deck is here:…
Read 16 tweets
21 Feb
Re: Fannie/Freddie-“Indy Switch” Is Key. Got some color that while FHFA was indeed frustrated that SM didn't pull the trigger before leaving office, they were all indeed contending with the issue of not wanting to inflate the value of the cap stack prior to a cap raise. Cont’d…
In other words, this seems to corroborate my "Indy Switch" theory to a Fast Recap: because SM ran out of time and/or “wimped out,” he did the next best thing by wording the LA to 1) motivate settlement, 2) create the conditions for a cap raise SIMULTANEOUS with dealing with SPS.
I continue to think that this “Indy Switch”/Fast Recap path is the only way for the companies to raise the required capital to replace the SPS in a way that does not present a danger to MBS/housing market stability.
Read 4 tweets
16 Feb
Musing of the Day: I know the Lord of Cyber Hornets is a genius, but at some point I predict that someone is going BK by levering up to buy a hyper-beta risk asset.…
When I was a convertible arbitrageur, I would sometimes negotiate with companies who had ITM convertibles to exchange their convertibles for equity early before their non-call windows were up. This allowed companies to deleverage early. This is what MSTR should be doing.
Most balance sheet implosions and even financial crises stem from a very simple issue: asset / liability mismatch. Cont’d...
Read 8 tweets
10 Feb
Re: Fannie/Freddie-Unfinished Business. I have some unfinished business to discuss that I couldn’t cover in yesterday’s interview, but more importantly, the US has major unfinished business in undoing one of the largest nationalizations in US history. Some comparisons follow…
I gave a talk in 2010 at the Value Investing Congress where I did an in-depth analysis of the GM restructuring, entitled “Finding Relative Value in a Topsy-Turvy World: General Motors Case Study.” Except for the GM part, I believe this title also characterizes the GSE opportunity
Force majeure has happened numerous times in this country, usually during times of market stress or war, BUT in almost every circumstance these industries were ultimately re-privatized. We are NOT Venezuela.
Read 20 tweets
5 Feb
Re: Fannie/Freddie-Thoughts on Don Layton’s “Living Will” Paper. This paper is a must-read; imho, it reinforces my primary GSE thesis: Receivership is NOT an option because TINA (There Is No Altnernative.” Cont’d...
The full paper is here:…. My thoughts follow.
I’ve believed from the outset in the TINA thesis, which is why JPS represent “perpetuity options.” Courts will only influence timing of recap IMO. Because TINA, recap is inevitable.
Read 12 tweets
2 Feb
Re: Fannie/Freddie-A PE “Perpetuity Option.” As we wait for SCOTUS, the temptation is to focus on every little “weed” of information (just like the lead-up to 1/20) while forgetting about the “forest.” In this thread, I summarize my thoughts.
For full disclosure, I’ve owned the JPS since the dark days of September, 2008 when these things got eviscerated down to 2-3c. I have been on this roller coaster a LONG time.
The crazy thing is: the thesis really hasn’t changed much. I called the JPS “perpetuity options” in 2011 when I presented the thesis at the Value Investing Congress.
Read 22 tweets

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